March 5 (Bloomberg) -- U.K. Defense Secretary Philip Hammond started a second round in his fight to protect his department’s budget after 2015, saying the number of military personnel will have to be cut if Chancellor of the Exchequer George Osborne forces through spending reductions.
Prime Minister David Cameron yesterday rebuffed a call from Hammond to find savings by cutting welfare spending instead of targeting the defense budget. Two days earlier, Hammond took the unusual step of going public with an appeal to protect the military’s capability.
“I have never said and would never say there aren’t further efficiencies we can take, and we are working now to identify where we might find still further efficiencies across the defense budget,” Hammond told reporters in London today. “Clearly if we go beyond what can be delivered from efficiency, there will have to be a reassessment of output.”
Cameron has pledged to protect the Ministry of Defence’s equipment budget, which will go up by 1 percent in real terms from 2015. He has not given any such promise for the rest of military spending.
Cabinet ministers are in discussions with Osborne about their departmental budgets for 2015-16. Home Secretary Theresa May, a Conservative like Hammond, is resisting cuts to her budget, while Business Secretary Vince Cable, a Liberal Democrat, says he believes taxes should rise to tackle Britain’s record debt. Osborne, who will set out his plan in early summer, has said he needs to find an extra 10 billion pounds ($15 billion) of savings.
Hammond was repeatedly asked today by reporters if the Cabinet is split on where spending cuts would fall and whether Osborne is listening to his concerns about defense capability.
“You are trying to make this feel like a conflict,” the minister said. “The reality is, I worked with George Osborne very closely for many years” when the party was in opposition before the 2010 election. “It is about us working together to resolve the best way of dealing with the fiscal consolidation that we need across government.”
Osborne is “certainly listening, but he has to deliver a further fiscal consolidation and I 100 percent recognize that imperative,” Hammond said. “We have got to work together to do it in the most effective way, and in the case of the MoD do it in the way that is least damaging to military capability.”
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